What I Did This Summer: Conduct statistics research

"What I Did This Summer" follows a number of University of South Carolina students this summer as they work, travel, and explore the world. Many of them are blogging about their adventures. This is the eighth story in the series.

Luke Whiteside

When we first contacted Luke Whiteside to find out about his summer statistics research, he hadn’t started it yet.

He wasn’t goofing off. He just had some traveling to do first.

“For the first part of the summer, I was in Valladolid, Spain with a USC faculty-led program,” said Whiteside, a senior statistics and mathematics double major from Columbia. “We were immersed in the culture with classes and living with a host family in the city. I wanted to improve my Spanish, and it was a great cultural experience.”

We asked, “Can we talk when you get back from Spain?”

“Well, I’m on my way to Paris, Brussels, and then Amsterdam,” he said.

He’d be back on campus July 9, he explained, and would start his research on July 12. THEN he could talk about the project.

"I’m working on a project about the derivation of the Black-Scholes formula,” said Whiteside, talking from his office in LeConte College.

“My advisor, Dr. Joshua Tebbs, helped me select the topic, and the SC STEPS to STEM program provided the funding to make it all possible. I’m presently studying a lot of background material on derivative markets, and I'm using four textbooks to learn the mathematics involved with it from different points of view.

Joshua Tebbs

“The primary use of the Black–Scholes model is for pricing options in the financial market,” said Whiteside, whose degree emphasis is on actuarial science. "To get the full understanding of it, I'm learning its relation with geometric Brownian motion, binary trees, the binomial model, and the lognormal distribution.

“Particularly in the market we are in now, it is good to know the assumptions that underlie the model, whether it is lacking, and how it can be enhanced.”

Another summer project for Whiteside is setting up an actuarial science club at USC.

“I’m writing the club’s constitution now and looking for charter members,” he said. “Students in statistics, mathematics, and business, like finance or economics, might be interested in joining the club.”

After he graduates, Whiteside would like to be an actuary. Actuaries use their knowledge of statistics, finance, and business to assess the risk of events occurring and to help create policies for businesses and clients that minimize the cost of that risk. Actuaries are critical to the success of several industries, including insurance and banking.